China Risk Oriented Solvency System (C-ROSS): The China Insurance Regulatory Commission (CIRC) is instituting sweeping changes through its three-tiered China Risk Oriented Solvency System (C-ROSS) framework that will dramatically impact how (re)insurers conduct business. It will strengthen capital requirements, risk management and transparency disclosures - bringing China in line with, and in some cases overtaking, global standards. The C-ROSS framework is similar to Solvency II: three tiers focusing on quantitative, qualitative and disclosure requirements.

Chart: Which Market Forces Do (Re)insurers See as the Most Disruptive?: Chart highlights the result of a survey taken of 107 insurance and reinsurance professionals conducted by Guy Carpenter at the 2016 annual meeting of the Property Casualty Insurers Association of America when asked which market forces are viewed as the most disruptive to the (re)insurance industry.

We all know that a picture is worth a thousand words. That is why GC Capital Ideas has the Chart Room. If you want to get a quick sense of important industry trends, the Chart Room provides snapshots of everything from catastrophe bonds to the Guy Carpenter World Rate on Line Index. We encourage you to use these charts in your presentations, along with the proper attribution.

Chart: The Matrix of Cyber and Property Lines Insurance Coverage: Chart examines the policy coverage matrix between cyber and property lines of insurance coverage. Below shows how the four types of subject matter (columns A-D) are generally covered by direct policies, relative to the various types of cyber and property perils (rows 1-5). Where cover is predominantly provided by property or cyber, the relevant icon is shown in blue. Where there is a degree of ambiguity, or coverage is limited, the icon is shown in gray.

Increasing External Demands Compel Companies to Improve Risk Management Disclosures: Guy Carpenter released its latest Enterprise Risk Management (ERM) Benchmark Review in 2014, providing an in-depth analysis of risk management practices and policies of 67 insurance and reinsurance companies located in Europe, United States, Bermuda, and Asia-Pacific. Based on publicly-available data from financial and risk reports, Guy Carpenter’s ERM Benchmark Review reveals that most (re)insurers are managing capital with metric-based frameworks and are publishing more about their risk management targets than seen in Guy Carpenter’s 2009 analysis. Capital market, legislative, and regulatory influences, such as the approaching implementation of Solvency II, are expected to further compel company managements to better recognize and analyze the risks of their enterprises.

Chart: Which Capital Sources Will (Re)insurers Utilize in 2017?: Chart highlights the result of a survey taken of 107 insurance and reinsurance professionals conducted by Guy Carpenter at the 2016 annual meeting of the Property Casualty Insurers Association of America when asked which capital sources they will utilize more of in 2017.

The global financial crisis of 2008 exposed the US mortgage industry, taxpayers and the global capital markets to the full loss potential of residential mortgage credit risk. A total shakeup of the US housing sector was the result: a return to prudent underwriting criteria; market standardization in product; Private Mortgage Insurer Eligibility Requirements (PMIERs); and a Federal Housing Finance Agency (FHFA) directive that mandates government sponsored entities (GSEs) Fannie Mae and Freddie Mac to begin transferring credit risk on the hundreds of billions of dollars of US mortgages issued each year.

The new reinsurance program consists of a USD 1 million limit to protect against flood claim losses to the National Flood Insurance Program (NFIP) that exceed USD 5 million in order to test the Federal Emergency Management Agency’s (FEMA) ability to receive reinsurance claim payments and process reinstatement premium. Once that USD 1 million limit is exhausted, the reinsurance will be reinstated for an additional USD 1 million limit to protect against large flooding events that generate losses to the NFIP in excess of USD 5.5 billion. Given the geographic spread of NFIP policyholders, such events would most likely result from flood losses that were related to a large tropical storm or hurricane.